Buying and Selling Cryptocurrency in Five Easy Steps
When dealing in cryptocurrency or other digital assets like NFTs, you need a place to turn to when buying and selling cryptocurrency. Cryptocurrency exchanges are usually the first stop for people just getting into crypto. They are the preferred option due to their convenience and efficiency (if you choose a good one). We will show you how to buy and sell crypto in five easy steps.
- Choose The Platform of Your Choice
Before buying cryptocurrency, you need to decide on the type of platform or facility that offers the kind of services you need. As noted above, there are different ways of getting crypto. However, we’ll discuss the two most popular options: crypto brokerages and crypto exchanges (centralized or decentralized).
A crypto brokerage serves as a middleman between a user and the crypto markets to facilitate the buying and selling of cryptocurrencies. However, crypto prices at a brokerage are not based on market values; the broker sets the price.
The other option, a crypto exchange, allows users to buy and sell cryptocurrencies. Crypto exchanges bring buyers and sellers together. We will focus on crypto exchanges in this guide since they are the most common platforms for purchasing cryptocurrency.
- Set Up An Account
Whether you choose a brokerage or an exchange, you have to create an account. After deciding which one to use, you must set up an account. Most exchanges will ask you to set up your account with some personal information and verify using your phone number and email. Some platforms may also ask you to provide additional information like an ID or driver’s licence.
The information required ensures that the process of transferring funds to your account will be straightforward. Without completing the verification process, you may not be able to make any purchases.
- Fund Your Account
Crypto exchanges allow you to purchase crypto using fiat currency or other cryptocurrencies. The best option is to fund your crypto account by connecting it to your bank account. You need to give out sensitive information to link your bank account to your exchange account, which is why you should use a trusted crypto exchange.
You can also use a wire transfer or a credit or debit card to put money into your cryptocurrency account. Note that most banks handle crypto purchases as cash advances instead of actual purchases. Cash advances come with extra fees and interest, so check with your bank to see how they handle crypto purchases.
- Make a Crypto Purchase
After funding your crypto account or linking your bank account, it’s time to make a crypto purchase. To do this, you have to make an order. You declare the type of crypto you want to buy and wait for the exchange to process your request. The order will be executed at the best available market price. Exchanges usually charge transaction fees, but these fees vary for different exchanges. A range of 0.5% – 5% is normal, but that depends on the type of transaction carried out.
- Choose a Place to Store Your Crypto
There is another thing to do after making a purchase: find a safe place to store your crypto. The crypto you purchased will be sent to the place of your choice. There are two options to choose from: hot wallets and cold wallets.
- Hot wallets
These are the more common options, especially among those who perform a lot of crypto transactions. A hot wallet stores its information online and can be accessed from different devices. The contents are protected using security measures such as passwords, two-factor authentication, and biometrics. Hot wallets are good for temporary storage, but they are not as secure as cold wallets.
- Cold wallets
These wallets store their information offline; they are not connected to the internet in any way. This makes them safer than hot wallets, but they are not as flexible in performing transactions as hot wallets. A cold wallet can be anything that can store information, such as a piece of paper, a flash drive in a safe deposit box, or even a computer without an internet connection.
This is how to get your crypto in five easy steps. After getting your crypto and storing it safely, you can now sell them through an exchange. Selling crypto is as easy as buying it. The crypto you have can be exchanged for fiat money or other cryptocurrencies.